Reasoning: Crude has been sold off close to the current cost of production of approximately $69. Saudi Arabia is flooding the market, pumping 9.9 million b/d, at the exact time that the Us has entered a recession withEurope already in a recession. Crude is telegraphing weak economic conditions and a lack of QE rescue by the Fed while the S&P is indicating that earnings will be fine or the Fed is close to some significant stimulus injection. If the Saudi gambit of suppressing oil is the stimulus then they are close to the bottom of the range that they can keep oil prices if the gambit is successful and the economy picks up. Other wise the S&P has a lot of catching up to do to the downside.

Action: We want to establish long December Crude vs a short December S&P 500.